No sooner had Life Technologies Corp. (NASDAQ: LIFE) announced its successful purchase of KDR Biotech last week, then out came Thermo Fisher Scientific (NYSE:TMO) with a $13.6 billion bid to buy Life Technologies itself.
This morning, Life Technologies announced that it has signed a definitive agreement to sell itself to Thermo Fisher for $76 per share, or about $13.6 billion in total plus assumption of $2.2 billion in net debt. That assumption raises the deal value to $15.8 billion in total, easily trumping what was being reported last week as an estimated $11 billion bid for Life Technologies from private equity powerhouses Blackstone, Carlyle Group, and KKR.
The deal must be approved by shareholders and needs regulatory approval.
Thermo Fisher CEO Marc N. Casper was quoted in the company press release as saying that "Life Technologies enhances all three elements of our growth strategy: technological innovation, a unique customer value proposition and expansion in emerging markets." Life Technologies and Thermo Fisher say the deal will build on their "technological strengths to accelerate results for life sciences customers working in proteomics, genomics and cell biology."
As of this writing, investors had bid up Thermo Fisher shares 2.8% today. Based on just the sticker price, and before factoring in debt, the $13.6 billion Thermo Fisher is anteing up values Life Technologies at 3.6 times 2012 revenues, or more than a 50% premium to the 2.3-times-sales valuation that investors place on Thermo Fisher's own shares.
Life Technologies shares were up 7.6% in morning trading, to roughly $73.15 as of this writing.
Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool recommends Thermo Fisher Scientific. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.